Philips v. Remington (High Court) Philips TM invalid

1
International Intellectual Property

• Profs. Atik and Manheim
• Fall, 2006

Trademark Ownership
2
Vittoria NA v. Euro-Asia (2001)
all right title and interest in the US
trademark, together with the good will of the
business
assigns to
purchases Vittoria-branded tyres overseas and
imports them into US (classic grey market
scenario)

• Tariff Act 526 (grey market imports)
• it shall be unlawful to import any merchandise of
  foreign manufacture bearing a trademark owned by
  a US person, and registered in the PTO, unless
  written consent of the owner of such trademark is
  produced at the time of making entry
• Does Hibdon (US) own the Vittoria TM?

3
Vittoria NA v. Euro-Asia (2001)

• Ownership (US)
• TM cannot be assigned in gross (detached from
  underlying business interest) only appurtenant
• Symbolic link to commercial activity not itself
  property
• TM is property only in connection with an
  existing firm
• Transfer of goodwill assures TM basis - protect
  consumers
• Transfer of assets not necessary to fulfill that
  purpose
• Restatement (3d) Unfair Competition
• Central inquiry whether use of the mark is
  likely to frustrate purchasers expectations
  created by the mark
• Transfer of goodwill rule helps assure those
  expectations
• Transfer valid VNA promotes goodwill associated
  w. TM

Compare other intellectual property
Business goodwill a form of con-sumer trust
4
Vittoria NA v. Euro-Asia (2001)

• Does US rule violate Paris 6quater?
• (1) When per local law the assignment of a mark
  is valid only if it takes place at the same time
  as the transfer of the business or goodwill to
  which the mark belongs, it shall suffice that
  the domestic portion of the business or
  goodwill be transferred, together with the
  exclusive right to manufacture or sell in the
  country the goods bearing the mark assigned.
• (2) The foregoing does not impose upon Union
  countries any obligation to regard as valid the
  assignment of any mark the use of which by the
  assignee would, in fact, be of such a nature as
  to mislead the public, particularly as regards
  the origin, nature, or essential qualities, of
  the goods to which the mark is applied.

5
Vittoria NA v. Euro-Asia (2001)

• Does US rule violate TRIPs Art. 21?
• Members may determine conditions on the licensing
  and assignment of trademarks, but compulsory
  licensing of trademarks shall not be permitted
  and that the owner of a registered trademark
  shall have the right to assign the trademark with
  or without the transfer of the business to which
  the trademark belongs.
• Does 526 violate Paris Art. 2?
• (1) Nationals of any country of the Union shall
  have the same protection as nationals
• (2) no requirement as to domicile or
  establishment in the country where protection is
  claimed may be imposed upon nationals of
  countries of the Union for the enjoy-ment of any
  industrial property rights.

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Vittoria NA v. Euro-Asia (2001)

• 19 CFR 133.23 (restrictions on GM imports)
• (d) Relief from detention of gray market
  articles. Gray market goods subject to the
  restrictions of this section shall be detained
  for 30 days .. to permit the importer to
  establish that
• (1) The trademark or trade name was applied under
  the authority of a foreign trademark or trade
  name owner who is the same as the US owner, a
  parent or subsidi-ary of the US owner, or a party
  otherwise subject to common ownership or control
  with the US owner
• Designed to avoid end-run around 526
• Which doesnt allow foreign corps to ban GM
  imports

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Vittoria NA v. Euro-Asia (2001)

• Are VNA Vittoria IT under common control?
• If so, 133.23 provides an exception to Tariff
  Act 526
• Common control (133.23(d)(1))
• Effective control in policy and operations
• Such as legal authority to control actions
• A close business relationship is not sufficient
• Could Vittoria IT avoid 133.23 via Licensing?
• TM owner must assure quality control
• Consumer protection theory applied here
• Naked licensing constitutes abandonment of TM

8
IHT Intl v. Ideal Std (1994)

• Facts
• American Standard Group (US) estab-lishes IDSA
  (FR) IDG (DE) subsidiaries
• Each sub registers Ideal Standard TM
• IDSA (FR) assigns (heating) TM to SGF (FR) which
  assigns it to CICh (FR)
• CICh (division of Nord-Est) manufactures Ideal
  StandardTM heating products in FR
• IHT (another NordEst division) imports Ideal
  StandardTM heating products to DE
• Ideal Standard GmbH (DE) TM on sanitary sues
  IHT to enjoin imports

v.
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IHT Intl v. Ideal Std (1994)

• Procedural Posture
• IDG v. IHT (regional court)
• Injunction in favor of IDG
• IDG appeals to Duesseldorf Higher Regional Ct
• Case Referred to ECJ
• Issue
• Compatibility of DE law with EEC Treaty
• Art. 30
• Bars obstacles to free movement of goods within
  EEC
• Art. 36
• Exception to protect industrial property (TM)
• Strictly construed

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IHT Intl v. Ideal Std (1994)

• Principles
• Independence of TM
• Rights can be assigned in 1 country and not
  another
• Per Paris 6quater (inferred from allowance of
  different standards for transfer of TM)
• Regional Exhaustion
• First sale in 1 EEC country exhausts TM rights
• If marketed by TM owner or economically linked
  firm
• TM owner cant oppose import in other EEC
  countries
• Necessary rule to reconcile Art. 36 with Art. 30
• Using TM assignments so as to disallow parallel
  imports defies Art. 30 community

Compare 19 CFR 133.23(d)(1)
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IHT Intl v. Ideal Std (1994)

• Analysis of Exhaustion
• Ideal Standard TMs of IDSA and IDG were under
  unitary control of American Standard Group (US)
• But IDSA assigned TM to SGF, with which it had no
  economic linkage breaking unitary control
• SGF assigned to CICh also no linkage w. IDG
• Holding
• CIChs sale of Ideal Standard products in FR did
  not exhaust IDGs TM rights in DE
• IDG can bar parallel imports by IHT

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Subject Matter

• TRIPs Art. 15
• 1. Any sign, or any combination of signs, capable
  of distinguishing the goods or services of one
  undertaking from those of other undertakings,
  shall be capable of constituting a trademark
  Where signs are not inherently capable of
  distinguishing the relevant goods

or services, Members may make registrability
depend on distinc-tiveness acquired through use.

• Nonstandard Marks
• Color (white) / Shape ??
• Secondary meaning

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Problem 4-9

• Does TTT infringe iPod? (color) (shape)

• Issues
• Has white acquired a scondary meaning on MP3
  players
• Association by public of
• Likelihood of consumer confusion? (note
  differences)
• Distinct packaging doesnt solve post-sale
  confusion

• Is color functional?, such that recognizing TM
  would put competitors at non-reputational
  disadvantage

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Philips Elect v. Remington (2002)

• Facts
• 1966 - Philips (NL) sells 3-headed razor
• 1985 - Philips seeks UK registration
• On basis of razors shape
• 1995 - Remingon sells razor in UK
• Procedural History
• Philips v. Remington (High Court)
• Philips TM invalid - functional shape
• Court of Appeal
• Refers to ECJ for preliminary ruling

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Philips Elect v. Remington (2002)

• ECJ Questions
• Are there categories of valid subject matter
• Which meet the distinctiveness requirement, but
  are
• Excluded because indistinguishable from like
  goods?
• Is shape capable of being distinctive only if it
  contains a capricious (non-functional) addition?
• Can a shape without capricious addition acquire
  secondary meaning if a large of the public
• Associates the shape with that vendor ( no one
  else)
• Has an expectancy re origin.
• If an average well informed observant and
  circumspect consumer will identify the good as
  originating from the particular trader

No
No
Yes
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Philips Elect v. Remington (2002)

• ECJ Questions
• Can a functional shape be distinctive if same
  function can be performed by other shapes?
• Functional shapes are not registerable subject
  matter even if same function can be performed by
  other shape

No